Capital markets News

HSBC leads Series C funding of HQLAᵡ DLT collateral platform


Today HQLAᵡ announced it closed its Series C funding round led by HSBC. The startup didn’t mention the amount or valuation. Many of HQLAᵡ’s existing shareholders participated in the round, including BNP Paribas, BNY Mellon, Citi, Deutsche Börse, Goldman Sachs and JP Morgan.

HQLAᵡ provides a distributed ledger technology (DLT) platform for collateral mobility. When banks want to borrow or lend collateral to other banks, they must wait two days for the securities transfer to settle. Instead with HQLAᵡ, the assets remain at the original custodian and the change of ownership can be logged instantly on the HQLAᵡ digital collateral registry, enabling intraday delivery versus delivery (DvD) at precise times.

Initially HQLAᵡ targeted securities lending, but more recently it has moved into repo, a far larger market. Additionally, it’s expanding to enable collateral mobility for margin requirements.

Jamie Anderson, Head of Collateral Treasury Trading at HSBC, will join the HQLAᵡ board. HSBC also recently adopted the Broadridge DLR repo solution. It’s been a busy few months for HSBC. The Hong Kong government used its digital asset issuance platform, HSBC Orion, to issue the world’s largest digital bond.

“In addition to investing in our company in support of our strategic platform vision, HSBC is also connecting to our platform, both as an AgentLender and as a Bank Borrower,” said Guido Stroemer, CEO of HQLAᵡ.

HQLAᵡ is one of an expanding group of DLT applications that enable intraday liquidity. Broadridge and JP Morgan have DLT repo platforms, and the bank also provides a collateral settlement solution. Finteum will soon launch intraday FX swaps, and Equilend is working on a blockchain solution for securities finance.